This week, Boeing announced layoffs and Honeywell cut guidance. This was expected given my July 17 article Honeywell Internal Email Shows Airplane Boom Time Over, More Layoffs Coming.
Boeing Gives 60-Day Notices
Please consider Boeing Employees Receive 60-Day Notices As Possible Layoffs Loom.
Sixty-day notices of “possible layoffs” were handed out to Boeing employees on Friday, a company spokesperson announced.
Details of exactly how many employees received such notices have not been released. However, spokesperson Jennifer Hogan tells News 9 the possible job cuts are not targeted toward a specific department and are company-wide.
Because the notices are for 60 days, Hogan says total layoff numbers may change through attrition, career changes and retirement.
Honeywell International Cuts Revenue Guidance
Honeywell International Inc. posted revenue and profit gains in its latest quarter but cut its revenue forecast for the year as the company saw core organic sales fall in its three business units.
Shares in the company, up 3.9% over the past three months, slid 1% to $117.50 in premarket trading.
Honeywell now expects annual sales of between $40 billion to $40.6 billion, down from its previous guidance for sales between $40.3 billion and $40.9 billion. It also increased the low end of its earnings-per-share guidance for the year by 5 cents, now expecting between $6.60 to $6.70.
The Real Numbers Behind GE’s “Beat”
On the surface, this morning’s GE non-GAAP results (defined as follows: “Non-GAAP results excluding acquired Alstom businesses, non-operating pension costs, gains and restructuring & other charges”) were spun as very bullish, with extensively adjusted revenues of $33.5 billion rising 15% and beating expectations of $31.4 billion, while non-GAAP EPS surged 65% to $0.51, well above the $0.46 expected.
Bloomberg immediately praised the result.
What was less, if at all, noted is that any comparisons to prior periods were apples to oranges, as the entire upside contribution came not only from transaction “gains”, which added $3.1 billion to the top line, and restructuring charges but all the inclusion of the recently acquired Alstom.
So for those curious how the increasingly industrial firm’s organic operations, and especially the above mentioned energy “and avation” held up in the quarter when excluding the contributions from M&A, GE pointed out that excluding Alstom; organic orders – those attributable solely to GE’s core ops – crashed by -16% organic while industrial operating margins went nowhere, and stayed flat. Even including Alstom, overall orders declined by 2% from $27.1 billion to $26.6 billion, driven by a plunge in equipment orders from $14.5 to $12.9 billion, hinting just how troubled the global manufacturing sector remains.
But the real surprise was in GE’s core-core operations, whose breakdown we had to dig deep inside the presentation to find. It was, in a word, a disaster. Here is the breakdown:
- Organic equipment, driven by market pressure in oil-and-gas and transportation, plunged 30%.
- Power tumbled 27%
- And perhaps most disturbing was Aviation, despite strong prior results, crashed 37%
It appears the slowdown in orders goes well beyond aviation.
Mike “Mish” Shedlock